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OPINION: Public must apply pressure to president, Congress to avoid 'fiscal cliff'

Posted: November 18, 2012 - 12:27am

A few days ago, U.S. Sen. Saxby Chambliss, R-Ga., told the Rotary Club of Savannah the only way to ensure President Obama and congressional leaders negotiate a solution to the pending fiscal cliff is for the citizenry to keep the pressure on both parties.

Chambliss is in a position to know. Not only is he a member of Congress, but he also belongs to the so-called Gang of Eight, a bipartisan group of senators who have tried — without success to this point — to find solutions to the nation’s tax and budget challenges that both parties can support.

In an interview with the Washington Post a few days before his speech to the Rotarians, Chambliss said:

“We’re up against a wall — a Dec. 31 deadline by which something has to be done. If we don’t do it, the consequences are going to be drastic.”

Nicholas Mangee, an assistant professor of economics at Armstrong Atlantic State University explained what’s at stake in an article Wednesday in the Savannah Morning News:

“The provisions embedded in the fiscal cliff amount to a reduction in the economy of roughly $600 billion, or 4 percent of gross domestic product. Past tax rate cuts — think Bush era taxes, payroll taxes and the alternative minimum tax — will be allowed to expire, providing much needed sources of revenue but simultaneously withdrawing much needed transactions money from individuals and business owners.

“Alternatively, pentagon and defense spending will experience reductions of over $50 billion each in 2013 alone. In all, federal spending is projected to shrink by $1.2 trillion over the next 10 years.

“If the U.S. takes the plunge off the fiscal cliff in totality, our economy will contract by 1.3 percent in the first half of 2013 and by 0.5 percent over the entire year, a surefire recession. The unemployment rate would flirt with 9 percent by the end of the year, a full percentage point increase from the present.”

What does that mean for you?

Middle-income families would have to pay an average of about $2,000 more next year, according to the nonpartisan Tax Policy Center.

The Congressional Budget Office calculates up to 3.4 million jobs would lost.

And the stock market could plunge. Uneasiness concerning the threat of the fiscal cliff already has driven the market to a series of losses and its lowest point in months.

Collectively, the tax increases would be the steepest to hit Americans in 60 years when measured as a percentage of the economy.

And, of course, there’s the matter of a swelling national debt. The U.S. government has run annual budget deficits in excess of $1 trillion in each of the last four fiscal years. A report Tuesday showed the government started the 2013 budget year with a $120 billion deficit in October, suggesting a fifth $1 trillion annual deficit is likely.

That adds pressure on the president and Congress to reach a deal.

Since the night of President Obama’s re-election we’ve seen he and congressional leaders, primarily House Speaker John Boehner, R-Ohio, take steps to stake out their positions, none of which are surprising. President Obama continues to insist he wants higher tax rates for people who make more than $250,000 a year; Boehner and other Republican leaders repeatedly have rejected that idea and say they want to revamp the tax codes and examine the nation’s entitlement programs.

Still, President Obama and Boehner have left openings.

Boehner has said he would be willing to accept new tax revenues, not higher rates, if Democrats accept structural changes to entitlement programs.

The house speaker also has said there’s a spirit of cooperation in Washington that gives him hope a deal can be reached.

During a news conference Wednesday, the president indicated he is open to working with Democrats even as he flatly rejected any budget deal that did not raise tax rates on income above $250,000 a year, even if it meant driving the economy into a recession.

He did not, however, rule out a compromise that could leave the top tax rates lower than during the Clinton administration, possibly combined with a restriction on tax breaks for top earners.

“I don’t expect Republicans simply to adopt my budget,” Obama said. “That’s not realistic. So I recognize that we’re going to have to compromise.”

Unfortunately, attention to efforts to avoid the fiscal cliff has been distracted by the sex scandal surrounding former CIA director David Petraeus with all of its lascivious appeal and a cast of characters straight out of a bad TV reality show.

That’s given some members of Congress a soap box to stew publicly over why the FBI didn’t tell them earlier about the investigation into Petraeus, his emails and his relationship with his biographer.

And a related sideshow continues to simmer over the government’s handling of attacks on the U.S. Consulate in Benghazi, Libya.

Those are serious matters, of course, but their direct impact on the American public and our quality of life — socially and economically — will be nowhere near that of the tax and budget issues wrapped up under the heading of the “fiscal cliff.”

The opening discussions between the president and congressional leaders were scheduled to take place Friday. As those talks begin, President Obama and Speaker Boehner — and the people around them — have no greater priority than to find enough mutual ground to say “we have a deal” well before the final seconds of 2012 tick away.

It would be unconscionable for them to indulge in continued posturing and intractable positions that would leave people of all ages and all races to spend the days of Christmas in financial fear and uncertainty instead of the spirit of the season.